The Ugly Truth About the American Dream

The promise of upward economic mobility is central to the American Dream. Marco Rubio invoked it at CPAC in 2010 with stirring language:

[America is] the only place in the world where it doesn’t matter who your parents were or where you came from. You can be anything you are willing to work hard to be. The result is the only economy in the world where poor people with a better idea and a strong work ethic can compete and succeed against rich people in the marketplace and competition. And the result is the most reliable defender of freedom in the history of the world.

This is critical to the conservative narrative about America and it justifies many of the policies which call for a less active government. Unfortunately, the truth is does not match the rhetoric. It turns that the American Dream of upward mobility is not equally within reach of everyone.

The Pew Economic Mobility Project has published a new study which looked at the factors which lead to downward mobility.

Previous research helped to lay out the broad contours of what is known about economic mobility. A 2008 Pew report discussed the lack of economic mobility among African Americans:

A startling 45 percent of black children whose parents were solidly middle income end up falling to the bottom income quintile, while only 16 percent of white children born to parents in the middle make this descent.

Similar trends are found in other income groups as well. In another disturbing example, 48 percent of black children and 20 percent of white children descend from the second-to-bottom income group to the bottom income group. In addition, black children who start at the bottom are more likely to remain there than white children (54 percent compared to 31 percent).

The 2011 study (which used a different sample group) wanted to ask a broader question: what factors are causing this to occur? The study looked at different measures of absolute and relative income inequality and determined which factors were the most significant in downward mobility.

(One of several charts associated with the story, the rest can be seen here.)

Pew’s Economic Mobility Project Manager Erin Currier explained to FrumForum that the factors which had the most impact in determining downward mobility were levels of education and whether or not individuals got and stayed married. While perhaps not unexpected or controversial findings, the report underscores the importance of these factors. As Currier explains:

Regardless of how we measured downward mobility … we see the same pattern emerging. Post-secondary education and higher educational attainment matters, no matter how you measure downward mobility. This is a key reason why some people might be able to maintain their middle class status and some may not.

The second key finding is that marital status is a key piece that explains why people stay in the middle class or fall out of it.

In this current generation of adults, we have seen a huge increase in two-earner familier. It’s very important for family incomes that woman have entered the labor market.

When you look at people who become divorce, separated, or who are never married, it’s less surprising that they would have less of a chance of staying in the middle class than someone who is married.

While this is not surprising, it is helpful to be reminded of what can undermine upward mobility, and not simply to assume that upward mobility is equally likely for everyone, or even worse, to trot out blasé arguments that the poor in America are at least fortunate enough to own microwaves and cable TV.

Recent Posts by Noah Kristula-Green

50 Comments so far ↓

Noah, one thing missed in your article, and which I would take exception to the comments by Rubio, is that “mobility” in the US now is far less than even in Europe. The US rates well down on the scale of upward social mobility, the ability to start up a new business, or even the ability to maintain one’s current status. For years, we’ve kept saying the US is the only place where someone born poor can achieve their dreams of rising to the top, but the actual data shows that for the last couple of decades that possibility – once true in the US – has slowly shut down.

If politicians want that ideal to become reality again, they need to stop talking what used to be and start thinking about how to create that reality again…and, honestly, I don’t see in any of the current GOP policy ideas anything that will make that ideal once again a reality.

Mr K-Green, it is good that you note the Heritage Institute’s obtuseness in claiming that access to household appliances means there is no poverty in the US. If only you had also recognized that Sen Rubio is equally wrong. The US trails Europe by a large amount in measurements of social mobility. A link if you’re interested: http://www.voxeu.org/index.php?q=node/338

The “American Dream” is a fairy tale we read just before we put ourselves to sleep.

Tom Hertz did a study for American University; part of the results were a table comparing a parent’s income quintile in 1967-1971 to a child’s income quintile in 1994-2000. The report is at http://www.americanprogress.org/issues/2006/04/Hertz_MobilityAnalysis.pdf. To specifically answer your question, he found the probability of a child born to a parent in the lowest quintile reaching the second quintile to be 24%, and the probability of them reaching the third quintile to be 15.5%.

@Redrabbit, almost, but not quite as empty. How do you speak about foreign policy and not mention the Euro crisis? China only gets one mention? WTF? Pure pablum. If this guy is the best the GOP can offer in terms of rhetoric, this is pathetic.

How does he do it?
I know you were just asking that rhetorically, but there is a pretty clear answer.

Rubio is just a neocon hack living in the past. His obsessions are Cuba and the laundry list of dictators that the neocon warmongers hated.

His entire foreign policy world view is rooted in the cold war and the ‘war on terror’.

Besides. The things you mention, the Euro crisis, China, and several others that could be listed, are problems that cannot be solved by military force. Those sort of problems don’t even register for hawks like Rubio, who only see foreign policy as a vehicle for ‘national greatness’.

Strong facts in NKG’s article, but I don’t like the title. The fact is there is still upward mobility in America, it’s just not spread evenly across the board. The recession of course has meant there has been almost no upward mobility for anyone (except the wealthy have become wealthier), but that is a temporary situation, our economy will eventually right itself and mobility will increase.

It would be great if we could have a conversation about how to stimulate mobility in those groups that tend to be stuck, especially African-Americans, low education, non-married households (I saw something else today that showed of female single-parents 45% were below the poverty line, 24% of single fathers and 9% of married’s with kids).

This is a difficult conversation to have as the Right often blames “illigitimate, Kenyan, carpetbaggers” (thanks Smarg), etc., while African-American thought leaders such as Michael Dyson believe that people of color continue to be owed assistance due to persistent, ongoing discrimination. In my view, neither approach leads to groups achieving more, which is good for all America.

How do those African-American and Hispanic communities go from generational patterns of poverty of income, education and ideas; to growing, participating members of society? We see other cultures (notably Asian, but certainly others) come to America and thrive.

“How do those African-American and Hispanic communities go from generational patterns of poverty of income, education and ideas; to growing, participating members of society? We see other cultures (notably Asian, but certainly others) come to America and thrive.”

This is an area I think both the right and the left have something useful to say. It’s complex, and it’s unfortunately discussed as if there are only two ‘sides’.

Immigrants from east and south Asia commonly have family resources to draw upon. We don’t see low-income Asians immigrating here generally, not for some time. These family resources abroad help immigrant families here both monetarily, and in other ways. You can hardly stop a Bengali grandmother of a certain class, from going to America to take care of her American-born grandchildren, if it will enable the parents to succeed in business or professions. This is what I observe among the Asian born engineers I have worked with for decades. If an African-American or Hispanic family has always barely scraped by, as is common, there won’t be that down payment coming from the parents of a newly married couple, as seems to be almost routine for a lot of immigrant groups. American whites are in between; they have more resources, but not quite these cultural familial ties of duty.

On the other hand, African-American and some Hispanic communities have not emphasized education and certain values as more successful immigrant groups have, and it shows. Immigrants from the West Indies, also Black, and, while not impoverished, don’t have much family resource to draw upon, but still are much more successful than African Americans in this country. The difference is in their educational levels and work ethic.

We conservatives don’t need reminding that broken homes (the more P.C. term is “single-parent homes”) are not good for the rearing of children.

Many liberal ideas have fallen flat over the decades. But one of the worst “reforms” of all was no-fault divorce. No-fault divorce–not same-sex marriage–dealt the biggest crippling blow to the institution of marriage.

Time was when to get divorced, you actually needed a credible reason–marital infidelity, spousal abuse, violence, drugs, crime. Now it’s just a lifestyle change: You just don’t feel like living together, you just split. And the children be damned.

Why is it that the party of Ronald Reagan, John McCain, Rush Limbaugh, Newt Gingrich, Bob Dole, Rudy Gulliani, etc. etc. etc. is always blaming libruls for divorce? Those 6 men have 15 marriages among them – which ones were the sacred ones?

Sinz, can you comb through the details of each one and report back on which ones were “reasonable” and which ones were done just to fuck up the kids on purpose?

I mean, that’s not a governmental overreach, is it? To have some governmental official tell, say, Rupert Murdoch that yes, he can divorce his wife because he wants to marry someone else and then turn around and tell his cleaning lady that now, she has to stand by her mean, lazy, coach potato of a husband “for the good of the children”?

Stagnant wages were still present during the dot com boom. That boom papered over some of the problems, but it did not last. Those who saw the most benefit of that boom were white collar workers and parts of the service economy. Blue collar workers saw some benefit, but it was a bit more limited, and they had been under stress since the 1970′s.

The 90′s were more of a breather than anything else. And once we left the 90′s, the pain began spreading from the blue collar workers to the less skilled white collar workers, mostly those in lower management, HR, and generic office work.

“Many liberal ideas have fallen flat over the decades. But one of the worst “reforms” of all was no-fault divorce….Time was when to get divorced, you actually needed a credible reason–marital infidelity, spousal abuse, violence, drugs, crime. Now it’s just a lifestyle change: You just don’t feel like living together, you just split. And the children be damned”

May I ask a question?

If this was a ‘liberal idea’, then might I be inclined to ask why the states with the highest percentage of single parents and divorces are all red states?

As for social mobility, here’s my take: I think it has a lot less to do with divorce and a lot more to do with the massive wealth transfer that occurred starting in the Reagan years from the middle class to the uber wealthy. That, combined with the uber wealthy’s predilection towards using lobbyists to get their way, fostered an environment where the deck is now heavily stacked against those attempting to climb up in the world.

You’re absolutely correct. When I was growing up and entering the business workforce, during the 50s through 70s, upward social mobility was, if not easy, highly possible. A single income paid for home and hearth with enough left over to help kids get into college which every parent pushed their kids to attend. College educations, too, were affordable. For example, my older brother graduated from UC Berkeley without having 20 years of his income tied up in loans. He and his wife later went to UC Santa Barbara so he could obtain his PhD. Again, the costs were manageable as were mine when I went to college. Now, college educations can cost upwards of $100k, depending upon the school.

Dad may have been a mechanic or a steelworker, but the kids could aspire to and obtain a career as a doctor or lawyer or even higher. Ambition knew no bounds.

But as the “greed is good” mentality took over during the ’80s, costs grew and upwards mobility decreased. Suddenly, it took two incomes to meet the rising costs that one income did in previous decades. Children were left alone without encouragement to excel (“I’m too tired; go outside and play or sit down and watch TV. [Or] here’s $10 bucks, go to the movies or something.”) Work hours increased from 40 to 50 or 60 hours a week and salaries stagnated, making it even harder to keep up and even more difficult to invest in additional education to meet new workforce demands.

At the same time, the “greed is good” mentality financialized the economy, sending more financial resources upward to large or financially well off investors. Company CEOs no longer came from the ranks of manufacturing or production but from financial officers. Budgets were squeezed to produce better and better quarterly results to satisfy Wall St and investment fund investors while internal company growth, innovation, and investment lagged, including employee investment. And health care costs exploded, taking ever larger shares of both company and employee incomes. GM is a prime example, but certainly not the only one.

Just look at the most popular shows of the past two decades on TV. They’re all about instant celebrity and get rich quick. Not like the movies and TV shows of the 30s, 40s and 50s where labor was celebrated and kids grew up believing they could become President because there was a recognized ideal in society. The commonwealth worked for the good of the commons. That feeling amongst the commons no longer exists.

There are plenty like Smarg who blame employees and all the others left behind, but they’ve been spoon fed propaganda for decades. We didn’t get into this mess just since Obama became President. It’s been a long, slow process in the making, of more than three decades of decisions that valued increased stock prices and the wealthy over labor (labor earned income). The nation and all of her people are now reaping the rewards of that “greed is good” mentality.

We’re right back where we were in the Gilded Age, except now major corporations no longer have to play only on the domestic playing field; they have the entire world on which to play to extract exorbitant wealth, leaving domestic workers behind in an ever greater hunt for higher and higher quarterly profits.

What should we expect really. The right has waged war on the poor and every lever of government for decades now. Unless the base of the Republican party wakes up, nothing will change anytime soon. The upside is that their base is old and not long for this world.

For upward mobility, one needs to not make poor choices, AND have some measure of resources and luck. A lot of successful people, especially lately, were ‘born on third base and think they hit a triple’.

For some groups, a poor choice or two is limiting; for others, it’s catastrophic.

A general contractor I’ve hired for many things has his ne’er-do well brother working with him. Someone with a drug history, who needs supervision, but with that input can get some tasks done. They’re white and suburban.

Someone else, a ne-er do well with a drug history, is on the street. No contractor brother, no cousin with a hardware store who can hire them on for the lumber realted tasks. On the street.

It’s not just one’s actions that determine downward mobility.

On the other hand, of my friends who went to medical school, one had to drop out. Why? She was expected, whatever her aspirations and abilities, to take on care of a sick family member. She’s Puerto Rican. It’s that, or live with the disappointment and even enmity of her family forever. Others in similar situations – the ill person has and/or the family resources to obtain home care or assisted living, and even if not they would not think of asking a 20-something daughter in their family to drop out of medical school.

I wonder how much those negative stats have to do with the 70+% illegitimacy rate and single parent households or many of those “middle class” blacks were mainly do the civil service AA type jobs? Jeez, outside of bars and storefront churches, the last time I went through the hood every small business was run by Asians of one sort or another.

Americans always believe they are special.
Americans love a winner.
Americans believe they are the only ones on earth who are truly blessed.

But this is total unadulterated crap.

valkayec, speaking of upward mobility, America might not be the very best place to climb the ladder, these days. But not the worst. Still, come to Asia, if you wish to climb the ladder. There is still plenty of room at the top in Asia. Just bring money. Or, just be local. Or, just be a CPC member with great connections.

BASICALLY, if you really wish for TRUE MOBILITY, then you could not ask for much more than Huang Guangyu. Yes. He went from almost nothing. To being one of the richest men in China. And then he progressed to being disappeared in one of China’s prisons. Just how much more mobile might one wish to be?

In Red China, everything is always pretty mobile. What goes up. Usually comes back down fairly quickly. Red China has never been a great stickler for stability. And this is why. You should come to Red China to find great mobility. If this is what you truly seek.

Commerce Dep’t stats released a few days ago indicate that a typical American male, working 40 hours a week, is now earning less than 8¢ an hour more than he would have at in 1972! That means in 39 years, his annual wages have gone up a piddling $165. (Median earnings ’72 @ $47,550 – today @ $47,715)
The American Dream is dead. Thanks, Retardigans. I hope all those Chinese and Mexican workers who have prospered due to a half century of your corporate tax breaks vote for you!

True what you said, White Fang, but also false. Some of us old canines recall what it was truly like in 1972. Most dogs back then were fairly happy with their dog food. Unlike today.

You know, LoneWolf, I really think they are watering down our dog food without telling us. Because we just do not seem to have enough energy from the kibble to even have an ejaculation while having sex.

So please, my canine friend, do not trust the numbers provided to you by the Commerce Gov Despots.